Impediments to Headquarters –Subsidiary Knowledge Transfer in Chinese Multinational Enterprises (MNEs)

At a time of rapid expansion for China MNEs (e.g., Huawei, Tencent, Lenovo, Haier, and others), intra-company knowledge transfer has become a critical issue in achieving global competitiveness. In the race to compete with global competition from the developed economies, of particular importance is the speed by which China MNEs can upgrade and transfer technical know-how and working practises among their network of subsidiaries. This calls for a better understanding of intra-organisational knowledge transfer. This thesis focuses on the intra-MNE transfers between China headquarters (HQs) and subsidiaries. Prior studies of intra-company knowledge transfer have focused on factors associated with knowledge stickiness such as complexity (degree of tacitness), motivation to transfer, adaptability, absorptive capacity, type of knowledge (technical know-how versus working practices) and the incentives to transfer. Given the focus is cross-border transfer, efficacious transfer is defined as a problem related to perceived cultural differences. Therefore, the main aim of the research is to uncover some of the major impediments to knowledge transfer of China MNEs. Following a review of prior literature, the thesis develops a conceptual framework and from this six sets of hypotheses are deduced. The thesis adopts the objectivist epistemological stance prevalent in the knowledge management literature on the premise that knowledge is an asset or a resource that can be replicated only imperfectly. Data has been obtained from a survey questionnaire using snowball sampling, a typical non-probability sampling method commonly used in business research of the type encountered in this study. In total, 550 copies of questionnaires were distributed of which 289 met the validity criteria for this study. A combination of Chi-square tests, Poisson distribution in one sample Kolmogorov-Smirnov tests, Kruskal Wallis and regression analysis were performed to test the hypotheses. The main findings are that the variations in perceived cultural differences between MNE HQ China managers and subsidiary managers are significant and perceived cultural differences affect managerial dispositions to transfer knowledge. The four dimensions of managerial dispositions (trust, ties, competences and absorptive capacity) used in the study together with managerial competences and absorptive capacity impact significantly on the effectiveness of transfer. The thesis makes contributions to the intra-MNE knowledge transfer literature and responds to the call for more social-psychology informed research in the field of international business (IB).